No-claim bonus is linked to the owner and not the vehicle

Published in Mint on 9th Dec 2014, Written by Abhishek Bondia

I plan to buy a second hand car and the owner has not renewed the car insurance. When I buy the car, should I take a new insurance plan or continue with the existing one?
—Kavitha

You should buy a new car insurance policy. When ownership changes, renewal of existing insurance will effectively be treated as a new policy. The main benefit of renewal is a no-claim bonus (NCB). However, the NCB is linked to the owner and not the car. So, if ownership changes, the NCB is no longer offered on renewal.

The discounts given in motor insurance vary across insurers, so you should negotiate to get the best terms.

I live in New York and want to get my parents here for around five months. I would like to buy travel insurance for them. What is the procedure and relative cost for this?
—Gautam Singhal

Travel insurance policies are simple to issue. It is best bought online. Submit the travel itinerary and passport copy of your parents. Once you pay, a soft copy of the policy will be emailed. This is good enough for you to carry for claim purposes.

When comparing travel policy benefits, consider four items: a) benefit amount against each coverage, for example, hospitalization, dental, and baggage loss; b) deductible for each section; c) coverage for pre-existing diseases; and d) the reputation and hospital network of the insurer’s service partner. Premium is linked to coverage amount, age, travel destination and duration of stay. A $50,000 medical cover for a 60-year-old going to the US for five months would cost between Rs.10,000 and Rs.12,000.

I am 75 years old and have a medical insurance policy with a public sector insurer. I want to shift my branch closer to home so that it’s easier for me to deposit my renewal premium. How can I do this?
—Nathan D’Souza

Most private sector insurance companies have a centralized mechanism of policy issuance and servicing whereas public sector insurers depend more on branches for these functions. For public sector insurers, each branch works relatively independently. This is why sometimes a new branch may not want to accept the renewal premium of a different branch.
Some of the ways in which you could address this issue by doing a National Electronic Funds Transfer (NEFT) to your branch, or by finding an agent located close to that branch, and then sending the cheque by courier and a follow-up on the phone. This may be simpler than trying to change the branch from where the insurance is issued.

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